#### Explanation:

First determine how much interest was earned over ten years. Then add the interest to the principal.

To determine interest earned over $10$ years, use the following formula:

$I = P r t$,

where $I$ is the interest, $P$ is the principal, $r$ is the interest rate in decimal form, and $t$ is the time.

Convert 7.3% to decimal form.

$r = \text{7.3%="7.3/100=} 0.073$

P=$1200 $t = \text{10 yr}$Determine the amount of interest earned over $10$years. I=$1200xx0.073xx10=$876 Add the interest to the principal. $876+$1200=$2076

Aug 4, 2017

It depends on whether we're using simple interest or compound interest. Using simple interest, we will have $2076 after 10 years. With compound interest, we'll have$2427.61.

#### Explanation:

If the bank is using simple interest, then the answer is

$A = P + I$
$\textcolor{w h i t e}{A} = P + P r t$
$\textcolor{w h i t e}{A} = P \left(1 + r t\right)$
color(white)A=$1200[1 + 0.073(10)] color(white)A=$1200[1 + 0.73]
color(white)A=$1200[1.73] color(white)A=$2076

If the bank is using compound interest, then the answer is

$A = P {\left(1 + \frac{r}{n}\right)}^{n t}$

where $n$ is the number of times the compounding occurs in a year. (In this case, $n = 1$.)

A=$1200(1+0.073/1)^(1 times 10) color(white)A=$1200(1.073)^10
color(white)A~~$1200(2.0230062) color(white)A=$2427.61